Leading economists and financial analysts have charged the Federal Government on the need for innovation, infrastructure, and strong economic policies in order to optimize the growth potential of the nation’s real sector and by implication, sustainable boost its contributions to the nation’s Gross Domestic Product (GDP).
The development experts gave this charge last Friday at a pre-summit webinar organized by the Nigerian Economic Summit Group (NESG) ahead of its 30th Nigerian Economic Summit (NES) with the theme ‘Reversing the Decline: Strategies for Stabilizing Nigeria’s Manufacturing Sector.’
In his opening remarks at the forum, which featured key stakeholders to discuss solutions for halting the decline in Nigeria’s manufacturing industry and examining how current economic reforms impact the sector’s operations, the Director/CEO of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, highlighted the role of the manufacturing sector in Nigeria’s development. Despite its potential, the sector faces numerous challenges, such as inadequate infrastructure, fluctuating exchange rates, and poor access to finance.
Yusuf, the Thematic Lead of the Manufacturing Group, who represented the Private Sector Co-Chair of the Manufacturing and Mining Policy Commission (MMPC) Steering Committee, Engr. Mansur Ahmed, emphasized the importance of industrialization in driving economic growth, based on experiences Europe and North America, and stressed the need for a thriving manufacturing sector aided by right policies, innovation and critical infrastructure.
In his contribution, the Vice President of Dangote Industries Limited and NESG Board member, Mr. Olakunle Alake, pointed out that Nigeria’s manufacturing sector, which currently contributes only 8% to the GDP, was contending with stagnation due to issues like erratic power supply and inadequate infrastructure.
He stressed the need for collaboration between the public and private sectors to develop policies that stabilize and rejuvenate the sector.
The industrialists also maintained that prioritizing Sustainable Development Goal (SDG) 9, which focuses on building resilient infrastructure and fostering innovation, remained crucial for achieving broader economic and social goals.
Delivering her paper titled ‘Re-imaging Industrialization: Leveraging Nigeria’s Natural Resources to Accelerate Industrialization’ Lumun Amanda Feese, suggested that Nigeria could learn from countries like Sweden, Finland, Australia, and the USA, which have successfully used their natural resources to drive industrialization through innovation and technology.
Feese, who is also the Facilitator of the Manufacturing and Mining Policy Commission, stressed the need for robust public-private partnerships and collaboration among stakeholders to ensure the sector’s growth.
Also, the Director of Corporate Affairs and Sustainability at Coca-Cola Hellenic Bottling Company Plc and Chairman of the Non-Alcoholic Drinks Sector of the Manufacturers Association of Nigeria, Soromidayo George, discussed the impact of recent economic reforms on the Fast-Moving Consumer Goods (FMCG) industry, highlighting the sector’s potential to reduce poverty by creating jobs and promoting economic diversification.
However, she stressed the urgency of implementing effective strategies and policies that align with Nigeria’s cultural context and are backed by data.
Partner & Tax Leader at PwC Nigeria, Chijioke Uwaegbute, in his strategic recommendations to stabilize the manufacturing industry, advocated for a temporary freeze on increasing levies and tax rates for 1 to 2 years to help the sector recover.
This is even as he also called for simplifying processes for accessing export expansion grants and other incentives, noting that some manufacturers currently face tax rates as high as 45%.
In his contribution during the pre-event summit, Acting Managing Director of FBN Quest Merchant Bank, Afolabi Olorode, spoke about the imperative of enhancing financial resilience to mitigate risks associated with foreign exchange volatility, scarcity, and inflation.
He also harped on the importance of better capitalization for manufacturing companies to balance debt pressures and suggested that Nigeria’s relatively low labor costs offer an opportunity to develop a skilled workforce in technical production and manufacturing.
